The New Bull Market

[ducati916]

This is where the trouble started...and will finish:

There is a run to Treasury paper and out of Corporates.

On a shorter timescale:

Quite what has the Bond market spooked isn't really clear. Too low inflation has been mooted, but that really makes no sense at all if you are a Bond holder, so I think we can discount that one.

Breaking down further:

August 5 could be a starting point for identifying causation. From Mr Bigdog:

Nothing particularly shocking there.

If we move to the Fed.: https://www.federalreserve.gov/publications/files/balance_sheet_developments_report_202008.pdf.pdf

We find this:

Now the drop-off in Fed. purchases of Corporates could well have pushed the Corporates out, precipitating, the current situation, as finding the marginal buyer for probably record level issuance. Here then is the answer to causation:

The fall-off in Fed. purchases, starting August, ran into increased debt issuance in September and the Bond market is having indigestion. Add into the mix a pretty active IPO issuance calendar and you can start to see the problem.

jog on
duc

 

[Smurf1976]

As long as everyone remember that if you can do your job remotely,any Indian Vietnamese or African can do it for much cheaper...
This is a move to the last stage of globalism.. everyone paid $2 an hour.
Where do you actually stand in that context?

Perhaps this discussion should be in another thread so as to not hijack this one but for the record, I've held the same view since the 1990's.

Globalisation will crash and burn once the corporate office workers lose their jobs. That's the point where they'll wish they'd stood with the factory workers as they were marched out the door a generation earlier.

Globalisation has pretty much run its course in my view and the major trend going forward will be in the other direction, indeed that already seems to be underway. I intend that as an economic comment not a political one although the two are related.

Perhaps better to have a separate thread on it though.......

 

[qldfrog]

The economic link was all about the work from home technology seen as a saviour/investment forming a new trend.
I disagree as i witnessed the effect of the call centers work from home in the 90s where i extrapolate that, as for call centers, the west will loose not only the job but also the technology behind these
We will see outsourced jobs but also tools
While outsourced manufacturing saw loss of workers, the key players US, Japan and Europe kept selling the machines.i do not foresee that happening with this wave of remote jobs and so see structural issue with a long term positive trend but with the US sheltered.
Obviously, as long as feds keep pumping money in, we can still see bull market, but without the base/foundations such as increased productivity, age curves, which pushed the 1980s bull market trend.
This is in no way in contradiction with @ducati916 view, i just do not see a supra bull over decades anymore
And obviously see the stay at home fad as unsustainable, but why not trading it..just not an investment for long term
A new black tulip

 

[qldfrog]

I shut up now and stop the littering

 

[ducati916]

Lots of snippets:

Junk bonds, issues atm.

Have the Robinhood traders discovered VIX futures?

Now some positives:

You just knew at some point CEOs to prevent all of their Option awards to themselves from diluting the stock, had to bring back repurchase of stock. This is a significant driver of market prices higher.

Banks are coining it in commodity trading. Wait for a blow-up from 1 or more Hedge Funds/Banks:

The short volume in NG nearly always claims at least 1 victim a year.

From flippe-floppe-flye: there is a lesson in there

And finally:

It looks atm (don't hold your breath) that the (current) worst is behind us. If we hold the vol. in check through Friday, then we have reached the extent of the corrective decline. I added today to DPST and DFEN. I think this is the bottom. But given that this is Sept/Oct and elections round the corner, I could well be wrong.

I'll post the after market charts later.


jog on
duc

 

[ducati916]

Positive news:

Futures (probably) reacting to (buy) the rumour:

jog on
duc

 

[aus_trader]

Locally Banks are having a big day, something must be up

Disclosure: I hold BOQ in Speculative Stock Portfolio.

 

[Smurf1976]

Locally Banks are having a big day, something must be up

I assume it relates to the government's ideas of relaxing requirements on borrowers?

If banks are less responsible for verifying ability to pay etc then they can lend more money and that brings more profit. Not necessarily good in the long term but short term it's good for banks at least.

 

[aus_trader]

Yeah. I also heard on the news that there is extended support for small businesses that are facing bankruptcy, so that's got to be good for the bank balance sheets in terms of reducing their asset write offs.

 

[sptrawler]

Putting some balance into the lender/borrower responsibilities, if the lender has to take full responsibility they won't lend, simple really.

 

[Dark1975]

Although futures look either neg or positive right now, my view hasn't changed , my personal view is that we will slowly head lower as we head closer to the u.s elections, the Nasdaq looking more likely pulling the general market down in turn which will pull the dow with it,
As the old cliche goes " when America sneezes the world catches a cold", So some interesting buying opportunities in the xao the next 2 - 3 weeks,
I think personally after the u.s elections the dow and the xao will jump on the bull run, as with low interest rates where else can u put money,
I will post a technical view later when I get back into my office

 

[Dark1975]

2hrs later futures look grim, friday jitters , could be a interesting week coming up

 

[Dark1975]

I noted on a technical on the Nasdaq 100 eft the 26ema crossed over on 12 ema shows a change in trend line and same on the Xao (asx)
note the cross overs shows the trend line,
Tho saying this its only recently crossed over on the 14th of sept, I guess from a lot of building factors :
* Up coming U.s elections
*No second stimulas as yet ( democrats ploy i'd imagine to make trump look bad up and till lead up)
*covid numbers still growing
*Nasdaq looming to such highs it was likely for a correction

Tho just my personal opinion , I'm thinking it will swing right around after the U.s election

 

[ducati916]

Trump is not helping matters re. the election:

The Bond market has calmed:

And stocks are following suit.

jog on
duc

 

[ducati916]

The gold bulls have gone quiet, or at least relative to the last few months, which is odd given the uncertainty around the election.

Long Term chart:

The turn (in hindsight) can be clearly seen and had one been looking, in real time (some were, Mr Rederob).

Now looking at a Short Term chart (same chart):

The breakdown and almost inevitable break higher easily seen in hindsight and probably in real time had one been looking. The question of course is: where to now?

My money (would be if I were trading this) be short gold to the support line above (remember this is a ratio chart) where one must then re-evaluate the trade.

The problem that I have with gold trading is that there are so many theories that account for the causation in the movement of gold and keeping track of all the various theories is just too time consuming, because for me, it is all about interest rates (hence the above chart). Trading interest rates, which in trading gold you are trading by proxy, is fraught with difficulty as you are contending with Central Banks, primarily the Fed. In theory, now that the Fed. have confirmed low rates through 2021, gold should do well. However, tiny basis point moves in the 10Y seem to exert significant movement in gold.

I'm going to keep an eye on these relationships going forward (more closely than I have) as there could be some longer term swing trades that could interest me as long as I can jump on board early.

jog on
duc

 

[ducati916]

Both QQQ/SPY sitting on support:

Next week is shaping up to confirm the bottom in the pullback and trade back towards the highs in both indices.

The risk is that Bonds could re-ignite any weakness:

Bonds turned down Friday without any technical test, which means they could turn back up to test technically. Personally I don't think that they will, but that is a highly subjective and speculative statement. With the election pending and all manner of issues being raised by the election, the Bond market could be far more volatile than it is usually (unless the Fed. weighs in) while the politics sorts itself out.


jog on
duc

 

[ducati916]

Nice start to the week:

No comment required.

jog on
duc

 

[Chronos-Plutus]

Nice start to the week:

View attachment 112384

No comment required.

jog on
duc

Would you like a dissertation?

I spent a fair few hours studying fluid mechanics today; to try and keep pace with the professors in this city; perhaps if I dedicate 5 hours a day for the next 10 years..

What did you do?

I help people that are worthy, when I can, but I don't really work for free!

 

[Chronos-Plutus]

Would you like a dissertation?

I spent a fair few hours studying fluid mechanics today; to try and keep pace with the professors in this city; perhaps if I dedicate 5 hours a day for the next 10 years..

What did you do?

I help people that are worthy, when I can, but I don't really work for free!

As long as Trump and Biden are not taking drugs; the game is fair this Tuesday!

 

[Chronos-Plutus]

I will not bet and personally will not make any money either way on the debate.

So let's see a fair debate!